SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended December 31, 1999
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from ____________ to _____________
Commission File No. 000-24484
A. Full title and address of the plan, if different from that of the
issuer named below:
MODIS PROFESSIONAL SERVICES, INC.
RETIREMENT SAVINGS PLAN
ONE INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
(904) 360-2000
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
MODIS PROFESSIONAL SERVICES, INC.
ONE INDEPENDENT DRIVE
JACKSONVILLE, FLORIDA 32202
(904) 360-2000
REQUIRED INFORMATION
The following financial statements and schedules have been prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974, as amended:
1. Statements of Net Assets Available for Benefits as of December 31, 1999
and 1998.
2. Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1999.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized on this 28th day of June 2000.
MODIS PROFESSIONAL SERVICES, INC.
RETIREMENT SAVINGS PLAN
By: MODIS PROFESSIONAL SERVICES, INC.
(Plan Administrator)
By: /s/ Robert P. Crouch
--------------------
Robert P. Crouch, Vice President & Chief Accounting Officer
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<TABLE>
<CAPTION>
MODIS PROFESSIONAL SERVICES, INC.
RETIREMENT SAVINGS PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
FOR THE YEARS ENDED DECEMBER 31, 1999 and 1998
TABLE OF CONTENTS
<S> <C>
Report of Independent Certified Public Accountants 3
Financial Statements:
Statements of Net Assets Available for Benefits as
of December 31, 1999 and 1998 4
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1999 5
Notes to Financial Statements 6
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year 10
Schedule of Loans or Fixed Income Obligations in Default or
Classified as Uncollectible 11
Schedule of Leases in Default or Classified as Uncollectible 12
Schedule of Reportable Transactions 13
Schedule of Nonexempt Transactions 14
</TABLE>
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Report of Independent Certifified Public Accountants
To the Participants and Administrator
of Modis Professional Services, Inc. Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Modis Professional Services, Inc. (the Company) Retirement Savings Plan
(the Plan) at December 31, 1999 and 1998, and the changes in net assets
available for benefits for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Plans management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
As described in Note 8, during 1999 the Plan was amended to include the defined
contribution plans of three subsidiaries.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Modis
Professional Services, Inc. Retirement Savings Plan as listed in the index, are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PricewaterhouseCoopers LLP
Jacksonville, Florida
June 26, 2000
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Modis Professional Services, Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
As of December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Assets
Investments, at fair value:
Money market funds $10,322,988 $7,551,894
Mutual fund pooled accounts 97,632,294 49,808,179
Participant notes receivable 1,112,529 614,663
----------------- ----------------
Total investments 109,067,811 57,974,736
Receivables:
Participants' contributions 920,527 739,559
Employer's contribution 263,278 855,192
Accrued income - 1,927
----------------- ----------------
Total receivables 1,183,805 1,596,678
Transfer from merged plan 8,001,749 9,436,990
----------------- ----------------
Net assets available for benefits $118,253,365 $ 69,008,404
----------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
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Modis Professional Services, Inc. Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Additions
Additions to net assets attributed to:
Investment income:
Net appreciation
in fair value of investments $14,106,801
Interest 119,018
Dividends 7,106,329
----------------
21,332,148
----------------
Contributions:
Participants' 24,244,198
Participants' rollovers 2,181,206
Employer's 5,899,309
----------------
32,324,713
----------------
Total additions 53,656,861
----------------
Deductions
Deductions from net assets
attributed to:
Benefits paid to participants 16,599,629
Other 5,734
----------------
Total deductions 16,605,363
----------------
Net increase prior to transfers 37,051,498
Transfers from merged plans 12,132,867
Transfers from other Modis plans 310
Net assets transferred from Randstad
Employee Savings Plan 60,286
----------------
Net increase 49,244,961
Net assets available for benefits:
Beginning of year 69,008,404
----------------
End of year $118,253,365
----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
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Modis Professional Services, Inc. Retirement Savings Plan
Notes to Financial Statements
1. Description of Plan
The following description of the Modis Professional Services, Inc. (the Company)
Retirement Savings Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
General - The Plan, which was adopted July 1, 1997, is a defined
contribution plan covering professional employees of Modis Professional
Services, Inc. who are age 21 or older and have completed at least 375
hours of service during any 90 consecutive day period or one year of
service. To continue to vest in Company contributions, a participant must
work at least 1,000 hours each year. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions - Employer contributions to the Plan are at the discretion of
the Company equal to a uniform percentage of the amount of the salary
elected to be deferred. Participants may elect to defer and contribute to
the Plan up to 15% of their annual compensation, within the limitations
prescribed by law, and under the provisions of the Plan. Individual
participants' contributions are limited to an annual IRS maximum amount
($10,000 for the plan year ended December 31, 1999).
Investment Options - Under the provisions of the Plan, participants may
direct their contributions to be invested in various pooled accounts of the
Strong Mutual Fund Company. Contributions may be invested in one account or
allocated among different accounts. Changes in allocation of contributions
among accounts are permitted pursuant to contract provisions.
Accounts available to participants and the related investment objective are
summarized as follows:
Strong Money Market - This Fund seeks current income, a stable share
price and daily liquidity. The Fund invests in corporate, bank and
government instruments that present minimal credit risk.
Strong Government Securities - This Fund seeks total return by
investing for a high level of current income with a moderate degree of
share-price fluctuation. The Fund normally invests at least 80% of its
net assets in U.S. government securities.
Strong Asset Allocation - This Fund seeks high total return consistent
with reasonable risk over the long term. The Fund pursues this
objective by allocating its assets among stocks, bonds and cash.
Strong Common Stock - This Fund seeks capital growth. The Fund invests
at least 80% of its net assets in equity securities. It currently
emphasizes small companies that the advisor believes are
under-researched and attractively valued.
Strong Growth - This Fund seeks capital growth. It invests primarily
in securities that the advisor believes have above-average growth
prospects.
Strong Growth and Income - This Fund seeks high total return by
investing for capital growth and income. The Fund invests primarily in
companies that pay current dividends and offer potential growth of
earnings.
Strong Index 500 - This Fund seeks to approximate as closely as
practicable (before fees and expenses) the capitalization weighted
total rate of return of that portion of the U.S. market for publicly
traded common stocks composed of the larger capitalization companies.
Strong International Stock - This Fund seeks capital growth. It
invests primarily in the equities securities of issuers located
outside the United States.
Strong Schafer Value - This Fund's primary investment objective is
long-term capital appreciation. The Fund invests principally in common
stocks and other equity securities. Current income is a secondary
objective in the selection of investments.
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Strong Opportunity - This Fund seeks capital growth. The Fund invests
at least 70% of its net assets in equity securities. It currently
emphasizes medium-sized companies that the advisor believes are
under-researched and attractively valued.
Modis Stock Pool - This Fund was created specifically for Modis
employees. The fund purchases 95% of its value in Modis Stock. Five
percent is held in the Strong Money Market Fund. The combined value is
unitized. The participant then invests in these units.
Earnings Allocation - Plan earnings are allocated to participants' accounts
based upon their individual account balances as of each valuation date,
less any withdrawals made during the year.
Forfeiture Allocation - Forfeitures of the non-vested portion of terminated
participants' accounts related to the provisions of the Plan would result
in a reduction of the Company's contributions in the year of such
forfeiture. In 1999, employer contributions were reduced by approximately
$827,000 from forfeited non-vested accounts.
Vesting - Employee contributions plus actual earnings thereon are fully
vested at all times. Employer contributions made on behalf of each
participant are not vested until the employee completes four years of
service, at which time the participant becomes fully vested.
In the event of death or total and permanent disability while under the
Company's employment, all amounts credited to the participant's account as
of the subsequent plan anniversary date are considered fully vested.
Payment of Benefits - Upon retirement, death or disability, a participant
or participant's beneficiary will receive a lump sum amount equal to the
value of his or her account. In the case of termination other than death,
disability or retirement, the employee is entitled to receive 100% of the
vested account balance.
Participant Notes Receivable - Participants may receive loans from the Plan
within limits established by rules under the Internal Revenue Code. All
loans must be collateralized. A participant may use up to one-half of his
or her non-forfeitable account balance under the Plan to collateralize a
loan. Loans require periodic payments with principal amortized over a
period not to exceed five years, except for loans to acquire a principal
residence, which require periodic payments over a reasonable period
determined at the date the loan is made. All loans are considered a
directed investment from a participant's account under the Plan. All
payments of principal and interest by a participant on a loan are credited
to his or her account.
2. Summary of Significant Accounting Policies
Basis of Accounting - The financial statements of the Plan are prepared
under the accrual method of accounting.
Administrative Expenses - All expenses of administration may be paid out of
the Plan's funds or by the Company.
Investment Valuation and Income Recognition - The Plan's investments are
stated at fair value based upon quoted market prices. The Modis Stock Pool
is valued at quoted market prices, which represent the net asset value of
shares held by the Plan at year-end. Gains or losses on the sale of
investments are based on the cost or adjusted value of each specific
investment.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation in fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation on
these investments.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
significant estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
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Risks and Uncertainties - The Plan provides for various investment options
in any combination of fixed income securities and mutual funds. Investment
securities are exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes in
risks in the near term would materially affect participants' account
balances and the amounts reported in the statement of net assets available
for plan benefits and the statement of changes in net assets available for
plan benefits.
Benefits - Benefits are recorded when paid.
3. Investments
Investments which exceeded 5% of the Plan's net assets at December 31, 1999
and 1998 are summarized as follows:
Investments at Fair Value as Determined by Quoted Market Price:
<TABLE>
<CAPTION>
1999 1998
--------------- --------------
<S> <C> <C>
Strong Money Market $10,322,988 $7,551,894
Strong Mutual Funds pooled accounts:
Government Securities 8,371,798 5,940,232
Common Stock 18,741,607 11,112,930
Growth 25,338,051 9,698,290
Growth and Income 7,131,765 -
Index 500 16,970,018 7,451,853
Schafer Value 9,091,957 10,003,355
</TABLE>
4. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan agreement to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA. In the event
of plan termination, participants will become fully vested in their
accounts.
5. Tax Status
The Internal Revenue Service has determined and informed the Company by
letter dated August 20, 1998 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC.
6. Financial Instruments
Certain financial instruments potentially subject the Plan to
concentrations of credit risk. These financial instruments consist of money
market funds and pooled accounts with a mutual fund company.
The Plan limits its credit risk by maintaining its money market funds and
pooled accounts with what it believes to be high quality financial
institutions.
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7. Related Party Transactions
Certain Plan expenses for accounting, legal and administrative services
were paid for by the Company. These expenses were approximately $165,000
and $138,000 in 1999 and 1998, respectively.
Employees can elect to allocate their contributions to the purchase of
Modis Company stock units, via the Modis Stock Pool Fund.
8. Merger of Subsidiary Plans
During 1999, the Plan was amended to include the defined contribution plans
of three subsidiaries. The following table details the subsidiary, merger
date and amounts of assets transferred into the Modis plan.
<TABLE>
<CAPTION>
Subsidiary Date Amount
------------------------------------------------------------------------------------------ -----------------
<S> <C> <C>
Berger & Co. Taxsaver 401(k) Salary Reduction Plan July 31, 1999 $ 3,143,511
Zeal, Inc. 401(k) Retirement & Savings Plan August 31, 1999 987,607
Actium 401(k) Plan December 31, 1999 8,001,749
-----------------
$ 12,132,867
-----------------
</TABLE>
The assets for the Actium 401(k) Plan are reflected in the 1999 statement
of net assets available for benefits and in the 1999 statement of changes
in net assets available for benefits as transfer from merged plan.
9. Subsequent Events
Two subsidiary 401(k) plans are scheduled to convert into the Plan before
December 31, 2000. Effective January 1, 2000, the Plan has been amended so
that any eligible employee who has completed 375 hours of service during a
three consecutive calendar month period or one year of service shall be
eligible to participate in the Plan as of the date he or she has satisfied
such requirements.
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Supplemental Schedules
Modis Professional Services, Inc. Retirement Savings Plan
Schedule of Assets Held for Investment Purposes at End of Year
As of December 31, 1999
<TABLE>
<CAPTION>
Fair
Value
-----------------
<S> <C>
Strong Money Market $ 10,322,988
Strong Mutual Funds:
Government Securities 8,371,798
Asset Allocation 4,379,012
Common Stock 18,741,607
Growth 25,338,051
Growth and Income 7,131,765
Index 500 16,970,018
International Stock 5,095,212
Schafer Value 9,091,957
Modis Stock Pool 2,512,874
Participant notes receivable with interest
rates ranging from 7.0% to 10.5% 1,112,529
-----------------
Total investments $109,067,811
-----------------
</TABLE>
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Modis Professional Services, Inc. Retirement Savings Plan
Schedule of Loans or Fixed Income Obligations in Default or Classified
as Uncollectible
As of December 31, 1999
The Plan had no loans or fixed income obligations in default or classified as
uncollectible that are required to be disclosed in the Schedule of Loans or
Fixed Income Obligations in Default or Classified as Uncollectible as of
December 31, 1999.
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Modis Professional Services, Inc. Retirement Savings Plan
Schedule of Leases in Default or Classified as Uncollectible
As of December 31, 1999
The Plan had no leases in default or classified as uncollectible that are
required to be disclosed in the Schedule of Leases in Default or Classified as
Uncollectible as of December 31, 1999.
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Modis Professional Services, Inc. Retirement Savings Plan
Schedule of Reportable Transactions
For the Year Ended December 31, 1999
The Plan executed no reportable transactions that are required to be disclosed
in the Schedule of Reportable Transactions for the year ended December 31, 1999.
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Modis Professional Services, Inc. Retirement Savings Plan
Schedule of Nonexempt Transactions
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Identity of Description of Earnings lost from
Party Involved Relationship Transactions late contributions
----------------------------- ----------------------- ------------------------------ --------------------------
<S> <C> <C> <C>
Modis Professional Plan Sponsor Employer segregrated $6,047
Services, Inc. employee contributions
after the 15th business
day following the end of
the month in which amounts
were withheld from
employee wages. During the
year, the employer
funded all earnings
lost from late
contributions to the
respective employees'
accounts.
</TABLE>
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